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tv   Your Money  CNN  September 29, 2012 10:00am-11:00am PDT

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financial system are at risk of shutting down. >> the financial crisis actually kicked up two weeks earlier with the collapse of lehman brothers. >> we got a big problem. >> but by four years ago this week, it had morphed into a global freeze of credit that threatened the world with economic depression. >> this is credit at the highest level between institution congress was presented with one choice and one choice only. >> it's important to get credit flowing, again. >> bailout the banks, the banks that got us into this mess in the first place. >> should there even be a bailout? >> no bush bailout. >> americans protests and lawmakers balked. >> americans are angry and so are my colleagues. >> on september 29th, the bill to save the economy went down to defeat in the house of representatives. >> the legislation has failed -- >> i'm very disappointed in today's vote. >> to the democrats and republicans who oppose this plan yesterday, i say, step up to the plate. >> investors panicked, the dow
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dropped 777 points. the biggest single day point loss to date. >> this is what brought us to the brink of collapse. >> wow. all because annie went and got a house that he could not afford? >> $1.2 trillion in market value wiped out in one day. it's really psychological at this point. >> congress quickly reconvened and four days later on october 3rd, it passed the $700 billion troubled asset relief program. >> congress has agreed to a broad deal that authorizes the treasury secretary to start releasing money to free up the credit systems. that may have been the last time persons witnessed bipartisan compromise on something that really mattered in washington. four years later and on the eve of another election, voters are being asked, are you better off than you were then? the answer is yes because it was that bad. but how much better could it have been if washington had in the last four years put intense
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partisanship aside to work for the good of the american people? some people in washington have had your back. deal with failed banks. neal's job was to be the watch dog overtarp. he has written a book called "bailout how washington abandoned main street while rescuing wall street. you criticized tarp and we talked about that. for people to say things are as bad as they were, it is just flat out wrong. >> it depends on your perspective. if you are a wall street executive who is looking at losing your job and losing your bonuses and wall street bonuses returned to record levels in 2010 you were better off than you were in 2008. one of the millions who lost their homes because of running foreclosure relief programs or someone who is now enjoying their 99th week of unemployment
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you may differ with the fact that you're necessarily better off. we have a much more stable economy and hopefully things are on the upswing, but a lot of people who are unnecessarily left behind. >> shealia, your new book is qualed "by the horns." the titles of your two books have a similar theme to them. both of you think that congress and washington haven't done enough in the time since four years ago to bridge this gap between wall street and main street. what do we have to do so there's not this fight between wall street and main street? >> i think washington needs to be more independent of wall street. election officials to view the world which was the largest for the financial institutions and their broader country interests are not necessarily the same thing. but you hear that now. the bailouts were successful because they made money. well, yeah, they were successful in making sure all the banks
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were profitable and paying big bonuses, again, got a lot of that back and that is the barometer of success. i don't agree with that. i think you look at what is going on with the economy. it helps the banks. >> are we safer as our financial system safer than it was four years ago. >> >> yoyou're starting with a low bar. things are spinning out of control and the lack of information was profound. we did throw a lot of money at it. we just didn't really know what we were dealing with. in 2009 the system was stable and we certainly have done a lot more to get troubled mortgages restructured. that was the original idea. clean balance sheets up. they spend time risking those assets and not in a position to make risks and make new ones to support the economy. >> jessica yellin cnn chief white house correspondent. jessica, four years ago congress voted t.a.r.p. down before they
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passed it and sunk the economy because angry voters back then called their congressman and said don't feed the fat cats anything more and then congress behaved similarly during the debt ceiling debate and that cost america its credit rating. today, while congress should be out there protecting america from the economic storm that's blowing in from europe, it feels to me like they're doing the same thing. >> well, they're not, yes, they're not taking action on entitlement reform, on tax reform and all these issues that are also going to come up when they have to deal with the bush tax cuts, beginning of next year. but this is really an act of irresponsibility that is shared by both congress and, frankly, the white house because when they negotiated the debt deal last year and set up this sequesteration and this sort of economic, nuclear showdown, they knew it had to be negotiated in an election year, if it didn't get worked out last fall and
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everybody a in washington knows these kind of decision don't get made in an election year. everybody kicked the can into an election year when they knew it wouldn't get done and we have the prospect of dealing with it this year, probably next year. >> i am telling you about this economic storm that hit us, growth in the united states is slow and we're selling fewer manufactured goods. guess what, americans think the future is so bright they have to wear shades. with the threat of going over the fiscal cliff looming, is all this confidence misplaced? we'll talk about this, next. ♪ ♪ [ male announcer ] its lightweight construction makes it nimble... ♪ its road gripping performance makes it a cadillac. introducing the all-new cadillac xts. available with advanced haldex all-wheel drive.
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that is a third month in a row that prices have gone up and they were up in all 20 major markets in the united states. a survey of consumer confidence shows a nine-point increase in september and our own cnn orc polling shows that two-thirds of americans think that economic conditions are going to be good a year from now. clearly, no one is all that concerned about the economic storm i've been telling you about. congress has done nothing to head off the fiscal cliff coming in january. many of you tweet me saying i'm fear mongring and they'll get to it after the election, but here's what they're gambling with. $7 trillion in tax hikes and spending cuts that are mandated to take effect at the beginning of the year. at least starting at the beginning of the year. the white house estimates that a typical middle class family of four would see their tax bill increase by $2,200 in 2013. jessica, president obama could win. congress could come back with the same composition that it has
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now. what does the president do, as i ask, between election day and the end of the year to protect americans from the fiscal cliff? >> well, there's, obviously, two scenarios. but one where he will not extend the bush tax cuts for the wealthiest americans. so, the fiscal cliff is going to be folded in in some way into renegotiating the tax cuts and how they get extended. and i think he'll say it's a no go. i'm fought going to extend the bush tax cuts. so, either we can negotiate it now in these few remaining weeks before christmas or we can face a government shut down. i think there will be a little bit of chicken game playing at the end of the year. and what most people in washington think will likely happen is they'll negotiate some way to say, here's a broad framework for what both sides want, let's work it out next year. we'll see. >> sheila, i kind of think americans are a little dilutional they are about the economic future and i'm glad
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they are. i'm glad everybody is feeling a little better, we all are. what has to happen so the financial system supports this. so from a year from now we're not talking about the big, evil, greedy banks and some sense that banks are actually helping america move forward? >> ironically, i think the interest rate policies that are pursuing does dampen the incentives to lend. regional banks that make their money by lending money and the return they can get by lending in an uncertain economy is still quite low. the larger institutions, it's not such a bad deal. they can take their cheap money and reinvest it overseas and they don't have to lend to make money. so, i don't think the zero interest rate policiepolicies, they're well intended and it appears they're doing just the opposite. also, congress needs to get its act together with the president and this administration. there needs to be certainly with the real economy. the nonfinancial sector. what's the game plan on taxes, entitlement spending?
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it could be long-term and doesn't have to be a sudden shock. how will we get our fiscal house in order? the tax cuts and with the entitlement programs and the burden areas are going to be and those are really the tough decisions that elected officials need to make and just seem unwilling to make. >> neil, it seems obvious to us as we look at europe and all these countries that need bailout and i want the money with fewer conditions and the lenders say, no, you can't have the money with fewer conditions. that wasn't obvious when t.a.r.p. happened. there was a sense, we need to get this money out right now and don't get bogged down by conditions. is there something that should change or is that done? >> no, i mean, absolutely. remember, when they're bailing out the countries in europe, they're really bailing out the creditors of those countries, which are the giant too big to fail banks of europe and pushing money out without conditions. we saved the system that brought us to the brink of a global
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meltdown and, frankly, we'll do so, again, if there's not more meaningful change to the structure. >> so, short of the conditions, because the conditions, the popular conditions at the time were salary restrictions and bonus restrictions, but that's not what you're talking about. the conditions were the type of conditions that would have made the banking system safer. what is missing? what haven't we done? >> we now have the mega banks that were 20% bigger than they were before the financial crisis that still present a lot of the same dangers. when you see things like jpmorgan and jamie dimon and the parade of banking scandals that continue, this is part of the problem of having banks too big to fail, too big to manage and too big to jail and we have to do something within the constitutions whether dodd/frank were through a congressional sledge hammer and smashing them up into little pieces, which is something i would advocate. >> one thing that worked that
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fdic when you went in to take care of a bank on a friday evening, you had a whole system. you knew how it would unfold. you advocated that sort of system. to what degree does that sort of system exist? >> the fdic has come forward with protecting taxpayers from taking any exposure. i think they need more support from both the treasury department and the fed. i would like to hear the presidential candidates talk more about the doctrine too big to fail and it needs to be over. every level of government needs to make clear, there are no more bailouts. you get in trouble and you're taking losses and your counterparties are taking losses and i don't hear that a lot in the presidential campaign and i wish we would hear more of it. >> ali, i think this is a fabulous conversation and i wish this were something that anybody in washington would talk about. this is not something on a front burner for people who are in leadership and congress or frankly in the white house. i mean, the white house the pushout are these executive
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actions to try to alter some elements of helping some homeowners, but i do not hear any push in congress by leadership to do any of this. >> as you pointed out to us many times, there are conversations that should be taking place in the election generally that aren't taking place. so, we hope to have them here. thanks very much. jessica yellin joining us from washington. sheila bair and neil barosky, good to see you both. regardless of what happens in washington may not be enough to fend off the economic storm in europe. can europe's problems slow america down? richest quest joins us for a debate that you don't want to the writer's desktop and the coordinator's phone are working on a joke with local color. the secure cloud just received a revised intro from the strategist's tablet. and while i make my way into the venue, the candidate will be rehearsing off of his phone. [ candidate ] and thanks to every young face i see out there. [ woman ] his phone is one of his biggest supporters. [ female announcer ] with cisco at the center... working together has never worked so well.
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we are getting a fuzzy picture of a u.s. economy that cannot get its footing. consumers are feeling more upbeat and an improvement in housing probably has a lot to do with that. we just talked about the threat of the fiscal cliff, the u.s. centered storm, but we cannot ignore the head winds coming from europe. joining me now to debate this topic is richard quest in
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london, host of "quest means business" on cnn international. richard, today's q and a question is, will europe derail a u.s. recovery? i'll go first this time. give me 60 seconds on the clock starting right now. richard, the answer is categorically, absolutely yes. the storm hanging over europe just won't go away and each day that it stays there is another day that europeans who have been among the biggest and best consumers of u.s. produced goods and services are buying fewer and fewer of them. despite two years of bad governance and poor economic decision making in europe, americans are somehow weirdly feeling better about their own economy. richard, evidenced by this week's consumer spending and housing numbers, but cheap money and low home prices are driving the american sugar high. in the end, the austerity measures in europe are crushing. it's already pulverized
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economies into smith erenes. the euro zone has annan unemployment rate of 3.3% and poor americans have to keep their one eye on washington and one on europe, if there's any hope of getting out of these economic dullgens. don't make your problems our problem problems, richard. >> read my lips and read the question. will europe derail the u.s. economy or recovery? possibly, perhaps, but not inevitably. of course, europe has problems. no question about it. the euro zone is in recession d the ecb is about to start the printing presses. but the u.s. economic miracle, the recovery is by no means as strong as you would have us
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suggest. read last week's edition of "the economist" to see just exactly what is happening. manufacturing isn't as strong as people suspect. there are worries about chinese, the chinese economy and the china's relationship and, of course, there are serious concerns about the fiscal cliff. so, ali velshi, by all means, let europeans take their fair share of the blame, but it's nonsensical for you to believe that all the blame is on this side of the atlantic. >> well, you evolved a bit because at least you didn't start by saying that americans started this four years ago. we're getting somewhere. richard, a pleasure, as always. >> as always. >> have a good one. coming up next, i'll congratulate you for something you've done over the last few weeks. it wasn't easy and may not even pay off in the long run, but it's 100% american. ahhhh drill sound chirping electric shaver
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storm coming our way from europe and you need to take cover. i've given you reasons why. i pointed my finger at politicians that aren't doing enough to shelter you and argued with economists and even blamed you for your part in this. after all of that, i have to give you am props. all you see is sunshine and blue skies ahead. despite those threatening thunder clouds out of europe, the inconsistent monthly jobs report and the ongoing scorched earth politics in washington, apparently, you are feeling pretty good. consumer confidence jumped in september. take a look at that, by nine points. optimism about the jobs market drove that increase, despite the fact that we only added eed 96 jobs last month. let's see what we do when we get the jobs numbers on friday. never mind, this week's forecast for higher inflation, that's not bothering you or the punny increase we saw in your wages when they were measured on friday. in fact, you're feeling so good, you're buying homes, again. two different reports on the
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housing market showed big price jumps this week and even though sales of new homes fell slightly from the month before, analysts are saying that's because home builders couldn't keep up with the demand. finally, economic growth. gdp. pathetic. the u.s. grew at a poultry 1.3% annual rate during the second quarter of this year. the second three months of this year. that is lower than the last measure we had for the same period. you're not worried, the stock market even went up after that. so, while you're not listening to my economic storm warning, you are doing something that i command. you are making the economy the most important issue in this election. we all got side tracked with other issues, but the economy actually should be number one and where the votes really matter, it seems, you're favoring president barack obama. i want to bring in steven moore, editorial writer for "wall street journal" and a good friend of the show. christine romans also joins us. she is the host of "your bottom line" right here on cnn. i want to show you a poll of
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likely voters. in ohio, florida and pennsylvania, 51% of respondents say president obama would do a better job on the economy. no republican, by the way, has won the white house without winning ohio. florida and pennsylvania are also crucial states. steven, despite the trouble in the economy right now, is this weird opening this weird optimism the end of romney's chance to win? >> yeah. i think that upsurge in consumer confidence is hurting mitt romney, no question about that, ali. interestingly, i looked at the gallup data on consumer confidence and they came to a very interesting conclusion. they found that the big surge in consumer confidence on the economy was democrats. that democrats have had a huge surge where republicans have actually had a reduction in their confidence. what they found, by the way, is normally an increase in consumer confidence leads to the incumbent president doing better in the polls. they found in this case, it was
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the opposite. the increase in the numbers for obama and the polls has actually made democrats more optimistic about the economy. >> interesting. so, the idea of who might win the election is actually affecting the question. >> it appears so. it really does. now, look, i'm actually kind of optimistic. i like to look at this glass half full. you know, you are right that there are some signs of an economic cloud ahead, but, you know, some pretty positive signs, too. you got this trillion dollars of capital on the sidelines and you have these low interest rates that i think can help growth and you mentioned housing. ali, we haven't virtually built annew housing in five years in this country. you have to think that housing will really start to pick up. >> steven moore, have you become a democrat? >> no. i actually think that, obviously, if the economy, i think, look, if mitt romney was to pull this out, i think the economy is really going to do well next year. >> for three squares like us, the gdp matters and this reading we got on gdp this week surprised some of us.
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mitt romney hit president obama this week about the gdp number. listen. >> look at the numbers that just came out and the growth of our economy. 1.3% versus russia at 4%. china at 7% to 8%. we're at 1.3%. this is unacceptable. it is not working. >> christine, mitt romney has a point. that gdp number shows a very weak economy. americans are feeling better about the economy, despite the fact that we have hard numbers that show the economy is not doing well. what's going on? >> the consumer confidence is taken from the third quarter, right? that was the second quarter. in the second quarter we had the drought and that was something that suppressed economic technology and it is going to be overcome. the question is, are people feeling a little bit better now as we get closer to the election because the economy isn't -- >> you're saying it's an anomaly. >> it's a rear view mirror indicator and now people are looking forward. you look at the polls over and over again and majority of
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people say feels bad now, but i think it's going to get better next year and optimism is something that counts in the economy and you're starting to get a little optimism and one reason i thank you guys is because this was an emergency for four years and now bad things about the economy have become chronic, not emergency any more. people in a weird way are getting used to the fact they have to lower their expectations. i keep saying that it's been four years, exactly four years since this thing started. we all got an undergraduate degree in crisis now and we're starting all over, again. we have the degree under our belt and now we're trying to figure out what to do for the next four years. >> christine, let me say something about that. that is an important point and i worry that we're declining expectations. that's not america. i want you guys to read the editorial that we wrote in the "wall street journal" on friday called "as good as it gets." when john f. kennedy ran for president in 1960 against nixon, his theme of that campaign is, we can do better.
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and he was saying basically, look, the economic growth rate is not high enough and we can have more unemployment employme country. the economic growth is higher than what it is today. by the way, ali, i have not become a democrat. what i'm saying is that i think mitt romney really needs to reach out to americans aspirations and say, look, this economy is not doing nearly as well as we want. >> how much does housing count on this? if you're part of the economy, you have a job and you've got a little money in the bank, you're moving forward, again. you're refinancing. >> or at least you feel like you're moving forward. >> how important is the housing component of this to consumer confidence? >> it's very important because one reasons why americans weren't spending over the last two or three years, as you guys know, people's wealth was falling because the value of their home, which is still, for most americans, the primary asset was falling in value. if we can see an increase in home valus and see more home starts, i think that does give a
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big bump up in the economy. as i said many times on the show, the one thing i am most worried about is that tax increase happening in 2013 because i do think that could shove us over the cliff towards potential downward recession. >> the biggest tax increase in history, i think. like $2,000 to $4,000 per family. >> steven, the labor department went back this week and crunched all the numbers and revised its data to show that president obama now has a net gain of 125,000 jobs since he took office. you can see there, had.3 million jobs lost at the beginning of his watch, 4.4 million gained, roughly net gain is 125,000. bottom line, obama regains every last job lost in his watch and republicans lose a major talking point, which they have been giving up anyway recently. man up, do it now, on the record for my audience, repeat after me. presiden barack obama is the job creator in chief. go ahead, say it. >> i'm not going to say that because i still think this has been a miserable performance on jobs.
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we should be creating two to three times more jobs than we are per month. i'll give you the fact that they revised upward those economic numbers, but they revised downward the gdp growth rate number and even more importantly, i don't know if you all saw this. the census bureau numbers came out for the increase in incomes in august and it found another $500 decline in family incomes over just that month. that means under barack obama, this is a good republican talking point and the average american household has lost $4,500 in income in the last 3 1/2 years. >> that's a key point. the jobs replaced are not the sames that were lost. you saved yourself from a lot of tweets. >> quoting kennedy even. stephen moore, always a pleasure to see you. christine, good to see you. coming up, listen to this -- >> let's have a big hand for jennifer. >> in 1978 jennifer granholm was
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looking for live on the "dating game" and today her personal might read something like this. former governor of michigan enjoys hosting television show and speaking at national political conventions. when we come back, i'll ask her about her idea about a race for the top style job creation plan next on "your money." ♪ atmix of the world needs a broader that's why we're supplying natural gas to generate cleaner electricity...
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one of the most effective sheltders we can bill to protect us from the economic storm is infrastructure. the jobs created won't just help us get through this storm, they will produce projects that will boost u.s. prosperity for decades to come. want to bring in former michigan governor jennifer granholm and
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an author on "the governor's story a fight for jobs and america's economic future." trying to do for education, encourage investment at the state level. launching competition to fill a critical national need like infrastructure projects. the most private partnerships including funding. governor, welcome to the show, thank you for being with us. >> thanks for having me on, ali. >> the plan sounds great, let's talk details. how do you ensure that we undertake projects using private and public money that do create jobs and fix problems, as opposed to the accusation that we get from a lot of conservatives that say these things are just pork. >> well, first of all, in states, it's happening all the time anyway. every state almost has an economic development agency that has identified that state's
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strengths, weaknesses, opportunities and threats. a swat analysis, if you will. they decided to focus on areas of states within that economic borders. to put that kind of effort on steroids knowing that our economic competitors are not state to state, but, of course, state to country. what are other countries doing? they are luring other, they're luring our businesses because they're being aggressive. so, i want to see that happen. now, the question is, how do you make sure it's effective? you want to make sure that the government's dollar is the last dollar in or that if it's a tax incentive, which is really a but for kind of incentive. you're not going to be paying out money directly. it's money that is foregone, if there is economic development inside the state. so, the bottom line is, it can be done. it's being done on state level right now, but if the federal government came in as a partner on this, then it would really enhance our ability to attract and create economic clusters inside the states. >> i advocated that on this show and the idea of an inf
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infrastructure bank, but the criticism is pretty consistent from people who say, why is the government involved? your plan is to incentivize public partnerships and a lot of people say these projects don't create value on the xpayer side, on the government side. one example that's gotten a lot of attention is in chicago in 2008, a partnership paid the city $1.15 billion for 75 years worth of parking meter revenues and since then parking rates have gone up and the partnership is expected to turn a huge profit. the group bills the city every time a parking space is taken out of service. rahm emanuel is pushing back saying he's not paying the penalties. i know it is just one example, but how do you answer the critics who can find flaw in every one of these public partnerships? >> you have to craft it in a way to provide value for the citizens and jobs is one way of looking at that. you don't want to cause the citizens to pay huge amount of other dollars in fees in additional parking and taxation. that's why they've got to be
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crafted in a smart way and it's not always just an infrastructure project. it might be some kind of, not traditional infrastructure, you might decide as a nation you want to really invest in the grid, for example. so, how do you make that happen? so, partnerring with the private sector, everybody has a role. if you don't have the government as a player to do the things that government can do well, then you are, basically, forfeiting the race to other countries that are very aggressively partnerring. so, if you have a cluster that has both the university as a partner, as well as foundations as a partner of the government and certainly the private sector leading the way, why wouldn't you do that if it means jobs for your state? >> you know, 4 1/2 years ago, 5 years ago america got into a recession that you in michigan were very familiar with. you want to invest in people, soft infrastructure but people and you want to build a workforce that is competitive internationally and one thing you write is that we should
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learn from germany and subsidize employment rather than unemployment. what is it about the german model you're interested in? >> in tough economic times and when things are slow, especially in this manufacturing sector, instead of seeing full layoffs, what they do is the employees take a part-time position with that same mpany, but their salary is supplemented by the government and that way you don't have the private sector laying people off, paying more money to having less employees, they want to keep these employees, they're just in a down cycle. they part-time employ them. that's where you don't have the government supporting people who are unemployed. you have the government helping to finance the employment of people. germany has done really well and just really focus on training young people for technical skills and i think, i mean, in michigan, we did something called no worker left behind where we deployed community colleges in partnership with the private sector and the skills that they need so that when
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somebody is done with being on unemployment they come out and they have a job in an area where there's a skills gab that is filled by their training. >> this would take the decision either on and hired or off and fired. you are giving companies in leeway in the middle saying we can keep these employees on if you give them a little extra. interesting idea. multi-national corporations have about $1.7 trillion in offshore oldings and you want to do something interesting. you want to suggest lowering the corporate tax rate on a one-time basis to allow companies to repay, re-create that money back to the united states and then use the tax revenue from there to fund this infrastructure bank. so, we're coming full circle here. funding the bank is half the battle and i think that's an idea that can gain a lot of steam. how do you make sure you're finding the right projects? what do you use as a criteria to fund projects by an instructure.
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>> great suggestions out there how an infrastructure bank could be constructed. i think part of that money that is repatriated could go to maintenance and part of it investing in the future. the future type of inf infrastructure like grid or clean energy or even human infrastructure. but the bottom line is, the bottom line is, we have to get the financing to do that and you've got all of this money off shore. why not provide a one-time incentive for it to be brought back, but not just to go back into the company's coughers, not just to go into traditional tax, you know, without seeing a benefit. direct it specifically towards an infrastructure bank that could be created in a way that is future looking. >> jennifer granholm, thank you for joining us. did that whole "dating game" thing work out? >> i started out so well and you
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destroyed my credibility. i was 19 years old and let this be a warning to all you young people out there, there are things that last on video for a long time. >> when we were 19, we didn't think that happened and now you know it's all on youtube. good to see you. >> good to see you, too. >> host of "the war room" on current tv and author of "governor's story the fight for jobs and america's economic future." america's city fuel the economy, but their infrastructure isn't keeping up with the population. my next guest says we're in for balding boom larger than anything we've seen before. [ male announcer ] wouldn't it be nice if there was an easier, less expensive option than a traditional lawyer? at legalzoom you get personalized services for your family and your business that's 100% guaranteed. so go to today
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areas and the population of cities is growing. the urban population increased by 12% between 2000 and 2010. compared with an overall rise of less than 10%. the five fastest growing metro areas are washington, austin, texas, hinesville, georgia, mcallen, texas, and raleigh, north carolina. i want to bring in the professor at the university of toronto and the author of the rise of the creative class revisited. you say cities have become more livable but not all cities are booming. what do the successful cities do right? >> well, i think there's a few things that successful cities do right. the most important thing is that they invest in their human capital. they invest in their talented people. they have great high schools and particularly colleges and universities, but also the best cities are making themselves attractive for highly skilled, ambitious, and entrepreneurial people. they have brought crime rates
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down low. they have cleaned thenselves up, cleaned up the pollution and waterfronts and made themselves more livable. >> i came back from china and was marveling at all of the infrastructure growth going on there. we talked on the show about how washington is dysfunctional, but even state government is pushing back on infrastructure projects which should over time return the ca to them, but we don't seem to think that way effectively in america. where do you get the impetus for large scale infrastructure development in america, things like transit, you talked about building more transit than highways. where should it come from and where does it come from? >> i think in america we got bogged down in an inappropriate debate over economic policy. do we loosen monetary policy or stimulate. let's build great cities. let's rebuild our transportation system. let's rebuild our crumbling
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airports. let's rebuild our schools. let's build great communities for every american. you know, the mayors get this. the local leaders get this. time for washington, and this is what congress is doing. building cities at an incredible rate, ungrading transportation, up grading and improving fast rail. america has the ability to do this. we have to get with the program. >> you say the mayors get it. the money often doesn't come from the city. iteeds to come from the state or the federal government or the private sector. that seems to be the mismatch. every mayor in the country has some plan for how their city can do better. you're in toronto, one of my favorite cities, needs a better subway system. everybody has something they want to do, but the infrastructure is not keeping up with population growth and that's hurting commuters, for instance. they say the five most congested areas in the united states are chicago, washington, houston, new york, and los angeles.
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and the congestion in those areas costs commuters more than $1,000 a year, use of public transit is growing. how do we address this? >> well, you know, there was a great gallup survey this week which said something like two thirds to three quarters of americans have a great deal of faith in their local government and their mayors. at the same time, faith in congress has hit all-time lows approaching about 10% of us who have any falith in our congress. we not only need to give more power to our city. we have to tilt the balance in terms of revenue raising toward our cities. as we rethink our income tax and our tax strategy in the united states, i don't think it's just a question of how much more the federal government can tax and get us off the fiscal cliff. i think it's tilting the balance back towards the local level, which needs the tools and which needs the revenue and should be able to raise the revenue they need to drive -- the great economist at brookings said a long time ago, the appropriate
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place to make innovations, competitiveness and economic policy is not the national level but to empower the cities and communities to do it. i think it's part of what i have call this reset in america. we have to get power, not just the power to spend, but the power to raise revenue back in the hands of the mayors and the cities. >> interesting idea. richard, always a pleasure to have you on the show. thanks for being with us. >> thank you, and thank you for covering this, such an important topic which means so murch to our future economic growth. >> richard is a professor at the university of toronto. >> a slowing economy facing h d headwinds from europe and asia, this country needs action if we want a real sustainable recovery. i want to hear from you. the writer's desktop and the coordinator's phone are working on a joke with local color. the secure cloud just received a revised intro from the strategist's tablet. and while i make my way into the venue, the candidate will be rehearsing off of his phone.
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the u.s. economy is directly in the path of three massive storm fronts. one fueled by the debt crisis in europe. another from the slowdown in asia that's a result of the first one. but the storm that's most dangerous and potentially damaging is already causing problems at home. the fiscal cliff hits at the end of the year and businesses are already reacting to the uncertainty created by your political leaders. the result is a slow-down in hiring and investment. gdp was 1% in the first quarter, projections for next year may be downgraded soon, but going off the fiscal cliff is guaranteed to send us back in a recession. we saw what happened four years ago when both sides of the aisle came together to prevent a disaster. this is the same kind of critical moment. your economy depends on the willingness of your leaders to
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act. i say congress has gone from being benign to being threatening. you disagree? we well, you know where to find me at i read every message and i'm ready to debate you. thanks for joining the conversation. we're here every saturday, 1:00 p.m. eastern and sunday at 3:00 p.m. have a great weekend. hello, everyone. you're in the cnn newsroom where we're live this saturday, september 29th. i'm fredricka whitfield. president obama and mitt romney are about to come face to face in the first presidential debate. just four days away, both obama and romney are practicing this weekend while their campaigns are presenting each candidate as the underdog. pa


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